Tesla CEO Elon Musk says investors have convinced him not to take the company private.

Mr Musk said in a statement he made the decision based on feedback from shareholders, including institutional investors who say they have internal rules limiting how much they can sink into a private company.

Mr Musk met with the electric car and solar panel company's board on Thursday to tell them he wanted to stay public and the board agreed.

"Given the feedback I've received, it's apparent that most of Tesla's existing shareholders believe we are better off as a public company," Mr Musk said in the statement.

He said it would avoid the short-term pressures of reporting quarterly results.

The tweet said funding had been secured for the deal, but the company later said the details still had to be worked out with Saudi Arabia's Public Investment Fund.

The tweet said Tesla would offer $US420 per share, 23 per cent above the August 6 closing price. If all the shares were bought, the deal would be worth $US72 billion, but Mr Musk later said he expected only one-third of stakeholders to agree to the buyout.